By Barani Krishnan
Investing.com - Gold returned to the $1,600 level Thursday as investors turned to the safe haven after U.S. jobless claims hit record highs for a second-straight week amid the coronavirus epidemic and its debilitating impact on the world’s top economy.
Gold futures on New York’s COMEX settled up $46.30, or 3%, at $1,637.70 per ounce after the Labor Department said a record 6.6 million Americans filed for initial unemployment insurance last week, double the previous week’s all-time high.
“The COVID-19 virus continues to impact the number of initial claims,” the Labor Department said in its weekly claims report.
“Nearly every state providing comments cited the COVID-19 virus,” it said, adding that job losses were across industry, from food and beverage to lodging, manufacturing, retail, wholesale trade and construction.
Spot gold, which tracks live trades in bullion, was up $22.74, or 1.4% at $1,613.88 by 2:42 PM ET (18:42 GMT).
Some gold traders said they expected the yellow metal to build on its gains in coming sessions.
“With an extremely (favorable) fundamental backdrop and the markets in general looking to have calmed somewhat from the panic of recent weeks, there's a lot to like about gold,” independent analyst David Cheetham tweeted. “Technically a break above $1,600 would be clearly positive and a possible entry signal for longs.”
Others were not so sure, citing gold’s behavior through March, where it swung wildly at times, acting like a risk asset more than safe haven as investors liquidated their holdings in the precious metal to cover losses on Wall Street and elsewhere.
U.S. stocks rose on Thursday, tracking higher oil prices, after falling initially on the record jobless claims.
“The $1,640 an ounce region is formidable technical resistance,” Jeffrey Halley, analyst at online trading platform OANDA, said.
“We do not yet know if the rush to cash during stock selloffs has ceased to be an important driver of gold performance,” Halley wrote in his daily note. “With that in mind, bargain hunters at these levels should avoid loading up too heavily.”